Trending On Livewire: Weekend Edition - Saturday 20th September
The Fed cuts rates, US markets hit new highs, and small caps finally join the rally
Good morning.
Another eventful week.
The US got its long-awaited rate cut after the Fed delivered a 25 basis point cut on Wednesday and suggested a few more cuts to come over the next year. It’s likely to be good news for equities both in the US and further afield, even if valuations remain distractingly high.
According to JPMorgan, on each of the previous 16 occasions that the Fed has cut rates when equity markets are within 1% of all-time highs, the S&P 500 was higher 12 months later and averaged nearly a 15% return over that time.
Promising signs, or at least investors (and fund managers) seem to think so. This week, the S&P 500 and Nasdaq hit fresh all-time highs and even the Russell 2000 index, which tracks US small caps, got in on the act. It registered its first all-time high since November 2021.
It points to a broader theme: small caps are finally joining the party.
In Australia, the Small Ords was up 1.55% for the week (at the time of writing). By comparison, the ASX 200 was only up 0.82%. Elsewhere on the ASX, Energy endured a tough week after XRG pulled the plug on its $36 billion Santos takeover bid. It left STO shares down more than 10% for the week and dragged peer Woodside Energy down with it.
Have a great weekend.
Tom Stelzer, Content Editor, Livewire Markets
Vanguard's 6 shocking charts about retirement
Retirement should mean freedom, but Vanguard’s hot-off-the-press How Australia Retires 2025 report shows many Australians may not be on track. Nearly half of working-age people don’t have a plan, only 43% feel positive about retirement, and younger Australians are especially anxious. Based on a survey of 1,800 people, the findings reveal just how wide the gap is between expectations and reality - from income needs to home ownership and debt. In this wire, I break down six charts that highlight the key dilemmas Australians face in planning for their golden years - and give you a gauge to see whether you’re behind or ahead of the curve.
Can you protect yourself from financial misconduct?
There’s more than $1.2 billion at stake and 12,000 investors caught up in the latest funds blow-ups, a sobering reminder of how fragile trust in the financial industry can be. In two cases, liquidators allege investor money went towards luxury cars, including a Lamborghini linked to First Guardian Master Fund and another purchase by Australian Fiduciaries shipped to Malaysia. Sadly, this isn’t the first time Australians have been burned, and it won’t be the last. In this wire, I unpack the collapses of First Guardian, Shield Master Fund and Australian Fiduciaries, plus ASIC’s advice on avoiding similar traps.
Top 3 Wires this Week
Here are the weeks top viewed or liked wires by our subscribers:
.png,https://www.livewiremarkets.com/rails/active_storage/representations/proxy/eyJfcmFpbHMiOnsibWVzc2FnZSI6IkJBaHBBN2U1RFE9PSIsImV4cCI6bnVsbCwicHVyIjoiYmxvYl9pZCJ9fQ==--75d4be5a33ee17d084fda013a4154f3e322d03c1/eyJfcmFpbHMiOnsibWVzc2FnZSI6IkJBaDdCem9MWm05eWJXRjBPZ2wzWldKd09oTnlaWE5wZW1WZmRHOWZabWxzYkZzSGFRSmtBbWtDV0FFPSIsImV4cCI6bnVsbCwicHVyIjoidmFyaWF0aW9uIn19--dbcf8d7b6290376ca515990a95f79dcba96deb5c/ChatGPT%20Image%20Sep%2014,%202025,%2009_52_43%20PM%20(1).png)
Our Experts
Some of the best wires from our Contributors this week:
Macro
Viktor Shvets: The end of cycles and the cost of progress
View
Education
Your guide to building a growth portfolio in an SMA
View
Macro
Real economy vs stock market economy: why GDP ≠ equity returns
View
Chart of the Week: Why the Fed’s rate cuts could be a boon for shares
Timing matters. After a nine-month pause, the US Federal Reserve has resumed cutting interest rates, a move that history suggests could be very good news for equities.
According to a New York Times analysis, when the Fed has restarted cuts after at least a six-month break, the S&P 500 has risen over the following year in six out of seven instances since 1976. The average gain was 15.5%, compared with a long-term average of 10.1%.
Markets don’t always move in straight lines. Shares sometimes dip in the weeks after easing resumes. But over time, lower rates have generally been a green light for investors to push stocks to new highs.
One standout was July 1982, when the S&P 500 surged 47% over the following year, kicking off one of the greatest bull markets in history after one of the world’s worst inflation cycles was finally broken, with interest rates falling from above 20%.
With the Fed easing again, history may not repeat - but the pattern is worth noting.
Vishal Teckchandani, Senior Editor, Livewire Markets
Weekly Poll
Markets are back at record highs after the Fed’s latest rate cut. How are you positioning your portfolio?
a) 🚀 The Fed keeps cuttin’, I keep buyin’
b) ✋ Holding, but not adding more
c) ⏳ Waiting for a correction
d) 💵 Moving to cash
LAST WEEKS POLL RESULTS
We asked "Which type of returns do you prefer?"
The poll shows 64% said a balance of growth and income is essential, 21% said they want steady ASX dividends, 14% said they prefer S&P 500 growth, and 1% said they would rather buy property for income.
Get the Weekend Edition straight to your inbox
Popular and exclusive content from the week sent every Saturday morning
SUBSCRIBE TO TRENDING ON LIVEWIRE - IT'S FREE
Other Newsletters across our network
- Trending on Livewire Daily: Get the best of Livewire by signing up to our popular daily newsletter
- Market Wraps: Concise market recaps of the ASX's most critical events 2x daily
- Weekly Wrap: A summary of market highlights from the week, sent each weekend
Never miss an update
Enjoy this wire? Hit the ‘like’ button to let us know.
Stay up to date with my current content by
following me below and you’ll be notified every time I post a wire
Livewire Exclusive brings you exclusive content from a wide range of leading fund managers and investment professionals.
2 contributors mentioned
Livewire Markets
Livewire Exclusive brings you exclusive content from a wide range of leading fund managers and investment professionals.
Expertise
Livewire Markets
Livewire Exclusive brings you exclusive content from a wide range of leading fund managers and investment professionals.
Expertise
Comments
Comments
Sign In or Join Free to comment